RICS warns tenants - rents will rise further despite ...

There’s a blunt warning to renters this morning from the man behind the monthly lettings market snapshot from the Royal Institution of Chartered Surveyors.

RICS Chief Economist Simon Rubinsohn says: “Demand shows no signs of letting up, supply remains constrained and that means rents are likely to continue rising sharply despite the cost-of-living crisis.”

His warning comes alongside the latest lettings survey by the institution.

This shows that tenant demand rose firmly over the three months to July according to a big 54 per cent net majority of respondents.

RICS says this points to the strongest quarterly pick-up in rental demand since the start of 2022.

Set against this, supply - in the shape of landlord instructions - declined once again, with the latest net balance falling to minus 30 per cent from minus 24 per cent previously.

On the back of this enduring mismatch between rising demand and dwindling supply, a net balance of 63 per cent of lettings agents expect rental prices to increase still further over the coming three months.

RICS says this is up from a figure of 55 per cent in the previous quarter and marks a fresh record high.

In response, Tom Bill of lettings agency Knight Frank says: “Landlords have left the sector in recent years due to extra red tape and costs as they became a politically expedient target for the government.

“The unintended consequence has been more financial pain for tenants as the supply of rental properties falls and rents rise. Higher mortgage rates have compounded the problem which means the squeeze on tenants won’t vanish in the short term.

“That said, supply has risen in some areas as owners who have failed to sell for the asking price choose to let out their property until there is more momentum in the sales market.”